feed-in tariff

Green energy, jobs could flourish with a little nurturing

The studies are clear.

Clean energy development creates jobs. But so does offshore oil drilling and building mega dairies, and both -- although decidedly smellier in various aspects -- have proven track records.

Now a new report explains how federal, state and local governments on a relatively minimal scale can make clean energy more cost effective and drive its growth. So far, relying solely on the argument that pollution is expensive and clean energy costs less in the long run has failed to drive wholesale change.

The report, "CLEAN Contracts: Making Clean Local Energy Accessible Now," says government should to step up.

"Getting clean energy projects built rapidly on a large scale ... will require clear signals from federal, state, and local energy policy," wrote study authors Richard W. Caperton and Bracken Hendricks with Center for American Progress; John Lauer of Groundswell; and Courtney Hight of the Energy Action Coalition.

The report said the effort must include a "sustained national commitment to overcome the barriers facing the adoption of these advanced technologies in today’s electricity markets."

As if on cue, the U.S. Department of Energy reported this week a couple of massive loan guarantees. Diamond Green Diesel LLC, a proposed joint venture between refiner Valero Energy Corp. and Irving, Texas-based rendering company Darling International Inc., has been offered a $241 million loan guarantee, supporting construction of a 137-million gallon per year renewable diesel facility in Norco, La., about 20 miles west of New Orleans.

And Agua Caliente Solar LLC received a $967 million loan guarantee for construction of a 290-megawatt photovoltaic solar generating facility on 2,400 acres in Arizona's Yuma County.

U.S. Energy Secretary Steven Chu, who made the announcements, put it simply: "Solar projects like this are helping the U.S. to compete globally for the clean energy jobs of today and the future."

Green jobs are a bright spot in an otherwise grim economic forecast for California. Next10, a San Francisco-based nonpartisan think tank, said in its just released study "Many Shades of Green" that since 1995, jobs in California's green economy have expanded by 56 percent while the total economy grew by 18 percent over the same period. The report said that between January 2008 and January 2009 green jobs grew by 3 percent "while the total economy inched forward by less than 1 percent."

Next10 said the state's core green economy accounts for 174,000 jobs in California, with a rate of growth similar to that of software jobs since 2005.

“These jobs are growing in every region across the state, outpacing other vital sectors, and generating business across the supply chain,” said F. Noel Perry, founder of Next 10, in a statement on his web site. He attributed the vibrancy to California’s history of innovation and "forward-looking energy and energy efficiency policies.”

The private sector is largely in the driver's seat. The American Recovery and Reinvestment Act of 2009 dumped $3.2 billion into the Energy Efficiency and Conservation Block Grant program for energy efficiency retrofits to states, counties and local governments. But the effort, although well meaning, has been burdened by bureaucracy, slowing its potential job creation.

The CLEAN Contracts report says government can best help by clearing regulatory hurdles. "At every turn renewable energy is held back by the absence of national policies to guarantee equal standing with traditional sources of power," it said. "As a result, the growth of clean energy technology has not kept pace with the potential of these exciting technologies to meet our nation’s pressing energy needs."

The report focuses on establishing feed-in tariffs, which allow electricity produced by renewable energy projects to be sold to utilities at a fixed price for an extended period. CLEAN is an acronym for Clean Local Energy Accessible Now. The report calls for institution of CLEAN contracts, or feed-in tariffs, calling them "far and away the most important market creator for renewable energy in the world."

It cites DOE's National Renewable Energy Lab statistics that show 45 percent of wind energy and 75 percent of solar installed before 2008 as being directly linked to such tariffs.

Yet, feed-in tariffs remain controversial despite their success. Many view them as subsidies, which in this economic environment don't get a lot of love. Other industries also benefit from a greater share of entrenched subsidies, but that argument encounters tough political opposition fast.

A path possibly more palatable is one that Steve Forbes, editor in chief of the magazine that bears his name, regularly talks about: less regulation. Easing the rules and/or fast-tracking clean energy projects may work wonders. Providing incentives -- even meastures that cost nothing -- to companies, businesses and even home owners who install energy efficiency retrofits may also help.

Corporate America appears to be buying into the sustainability movement, but the companies going that route cite the economic benefits of saving energy and even public good will. Wal-Mart is an early adopter, gently strong arming its suppliers to do the same.

PepsiCo has its own strategy, hoping to be fossil-fuel free by 2023.

Will Nichols of Greenbiz.com reported that the company last week updated its progress on its 2-year-old Path to Zero program. He said PepsiCo published an update on its progress, mentioning commitments to unplugging factories from water mains, eliminating waste sent to landfills within 10 years and becoming a fossil fuel free.

The company also plans to make all its product packaging renewable, recyclable or bio-degradable, a process it started last year with Walkers crisps packets, Nichols wrote.

Corporate enthusiasm aside, many companies are locked in legal tangles trying to get solar projects started on federal land in the West, while others work to bring innovations from the laboratory to market. None of the challenges is expected to be simple.

We have our own opinions in the San Joaquin Valley, where my outfit, the San Joaquin Valley Clean Energy Organization, is working with local governments, regional jobs training programs and schools and colleges to position the region as a leader in the emerging green economy. We've got a small Workforce Investment Act grant to assist high schools and colleges train the next generation of workers to either find green jobs or become entrepreneurs who capitalize on the opportunities the green sector provides.

Our valley, which the folks at University of California Merced have dubbed Solar Valley, doesn't have a lot of capital, but the region does have the desire, a very willing work force and more sun than most and wind in the foothills. I'll keep you posted on our progress.

Power District Buys Solar With First Feed-In Tariff

The Sacramento Metropolitan Utility District has signed its first power contract under a new feed-in tariff, which allows producers to provide electricity at a competitive rate. The utility will buy 60 megawatts of energy - enough to power about 60,000 homes - from solar projects to be built near Galt and Elk Grove, according to this press release.

Recurrent Energy will build 12 five-megawatt power plants that should be operational in 2012. Officials at SMUD said the 20-year purchase agreement is a big step toward its goal of obtaining 20% of its power supply from renewable sources.

The forward-thinking utility introduced its feed-in tariff in January. Experts say those kinds of programs could help grow the emerging renewable energy program in California. A recent University of California, Berkeley, study cited in greentech media said a good feed-in tariff program could lead to $2 billion in new tax revenue, $50 billion worth of investment and 50,000 new jobs each year for a decade.

The federal Department of Energy says SMUD's feed-in tariff program includes rates that vary by time of day, season, length of contract, and production year, and offers two different rate schedules: one for combined heat and power systems and one for renewable energy technologies.

Rates for renewable systems like the ones in the Recurrent deal are dependent upon the year the system is placed into service. Once a system is installed, it is locked into those rates throughout the contract.

Renewables win 2, lose 1

Renewable energy in California took some punches to the gut and scored some victories some this week and last.

On the upside, the California Public Utilities Commission appears poised to launch an incentive program meant to boost renewable energy projects and San Luis Obispo County moved the 250 megawatt California Valley Solar Ranch a big step forward by issuing a draft environmental impact report.

On the downside, the California Legislature failed to pass a renewable energy bill and the industry still faces the potential passage of Prop. 23, which would roll back 2006 climate change laws.

The proposed CPUC decision issued this week would require California utilities to purchase power from solar and other renewables that produce from one megawatt to 20 megawatts. A megawatt is about the amount consumed by 1,000 homes.

The measure would establish what is known in the industry as a feed-in tariff, which essentially gives renewable energy generators about what it costs to produce power.

Adam Browning, executive director of Vote Solar, hailed the CPUC decision. He said in a statement that the proposed measure would assist mid-sized solar projects, helping them secure support similar to the state's "robust policies for developing large, utility-scale solar power plants and for putting smaller systems on homes and businesses."

Browning said his organization looks forward to working with the CPUC to finalize details of the measure.

The "CPUC proposal is designed to unlock that missing piece, providing an additional opportunity for solar market and job growth and for quickly bringing massive new amounts of clean energy to the state,” he said.

The San Luis solar project is bound for 1,900 acres in the Carrizo Plains, an environmentally sensitive region known for endangered wildlife. Eric Wesoff of greentechmedia.com wrote that the environmental impact report, or EIR, involved 60 biologists and 30 biological surveys.

The EIR goes through a public comment period before heading back to county government for possible passage. Wesoff said trucks commissioned by developer San Jose-based SunPower could begin rolling by next summer.

The renewable energy bill ran out of time in the senate by the midnight deadline Tuesday. SB 722 would have turned an executive order signed by Gov. Schwarzenegger last year requiring that 33 percent of California's energy come from renewable sources by 2020 into law.

The failure disappointed supporters. Lauren Sommer of kqed.org quoted Laura Wisland, a clean energy analyst with the Union of Concerned Scientists, as saying, "We think not establishing a 33 percent renewable portfolio standard this year is a huge loss to California's environment and economy."

Reports project green jobs, power

A couple of recent reports spell a bright future for the green building movement and renewable energy.

The green building industry will more than double by 2015 to a market value of $173.5 billion, according to the first of the two reports.

Fort Collins, Colo.-based EL Insights, an online energy industry trade publication, said expansion will proceed at a clip of about 19.5 percent annually from an estimated $71.1 billion this year. The magazine cited increased environmental awareness as the result of the Gulf oil spill, direct investment by large corporations and commercial construction.

Commercial green building is projected to grow by 18.1% annually, the magazine said. This would take the sector from $35.6 billion to $81.8 billion and create a potential 2.5 million jobs, which could expand the construction industry by a third.

"So if you haven't been paying attention to the U.S. Green Building Council, now is the time to start -- the nonprofit offers virtually endless amounts of information on green building studies and LEED certification," writes Ariel Schwartz of fastcompany.com. LEED is Leadership in Energy and Environmental Design.

The second report, "Economic Benefits of a Comprehensive Feed-In Tariff: An Analysis of the REESA in California," contains a caveat. The report by the Renewable and Appropriate Energy Laboratory Energy and Resources Group at the University of California, Berkeley says that nearly 300,000 green jobs could be created in the next decade but their materialization requires passage of the Renewable Energy and Economic Stimulus Act now pending in the state Legislature.

The report says the act -- AB 1106 and now in the Senate Appropriations Committee -- would not only enable the state expand its renewable energy to a third of all power generation by 2020 but create 280,000 jobs over the next decade. It also would "increase state revenues by an estimated $1.7 billion" and "stimulate up to $50 billion in total new investment in the state."

A feed-in tariff is defined as a "pre-specified electricity price paid to mid-sized clean energy distributed generation installations ... with rates set commensurate with the projected cost of generation." Said another way: Renewable energy generators would get about what it costs to the produce power.

The San Joaquin Valley Clean Energy Organization is a nonprofit dedicated to improving our region's quality of life by increasing its production and use of clean and alternative energy. The SJVCEO works with cities and counties and public and private organizations to demonstrate the benefits of energy efficiency and renewable energy throughout the eight-county region of the San Joaquin Valley.